Tony Abbott has predicted that the inquiry into institutional responses to child sexual abuse will be "best-funded royal commission in Australia history" after conceding that the inquiry had underspent its budget last year.

As the commission insisted it had enough funding to perform its work, advocates expressed alarm that money had been redirected to the "pink batts" royal commission into the Rudd government's home insulation scheme and concern that the inquiry might fail to meet increasing demand from abuse victims to be heard.

"At the moment, it seems to be adequately resourced, but the main game here will be for governments to appropriately resource the royal commission to finish its job," said Francis Sullivan, chief executive of the Truth, Justice and Healing Council of the Catholic Church.

The inquiry is expected next month to seek an extension beyond its December 2015 wind-up date, with Attorney-General George Brandis saying any request, and that additional resources that will be required, will be "fully and properly considered".

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Senator Brandis also revealed that the separate royal commission into the former government's home insulation scheme was likely to come in about $4 million under its $20 million budget in August.

Mr Abbott told Parliament on Wednesday the government had budgeted $377 million for work of the royal commission on child sexual abuse until mid-2016, signalling an extension would be granted.

"I would be fairly confident that by the time it is finished, this would be well and truly the best-funded royal commission in Australia's history," he said.

The secretary of the Attorney-General's Department, Roger Wilkins, has confirmed that $6.7 million in savings from the child sexual abuse inquiry's budget last year were redirected to the home insulation royal commission.

But Mr Wilkins told a Senate estimates committee hearing that "there should be no suggestion that funding was taken away from the child abuse royal commission that it needed".

Confirming a report in Fairfax Media on Wednesday, Mr Wilkins said $4 million was saved when a "capital fit-out" for the commission came in under budget, and $2.7 million was underspent on the legal costs of government witnesses.

Child abuse survivors reacted angrily to the redirection of funds, with Nicky Davis from the Survivors Network of those Abused by Priests saying members were devastated by the decision.

"We feel it's absolutely appalling that the Attorney General considers the child abuse royal commission a piggy bank to be raided," she said.

Caroline Carroll, chair of the Alliance for Forgotten Australians, which advocates for those who suffered abuse while in institutional or out-of-home care, described the diversion of funding as a "slap in the face" for survivors.

But the royal commission's chief executive officer, Janette Dines, who announced on Tuesday she will leave her position on 6 June, told the hearing the call on the government to support witnesses had been less than expected because many were supported by institutions.

"In our experience, the current budget estimates are generous and are sufficient to meet the anticipated need," she said.

Mr Sullivan implored the government to agree to the expected request for a time extension and additional funding. "No one inside government would have any idea what the scope of this problem is. No one should be second-guessing the royal commission," he said.

"It's quite obvious to us that the demands of the royal commission are increasing, that the engagement by individuals in the community to tell their story is increasing. Regardless of how painful, shameful and embarrassing that is for institutions in Australia like the Catholic Church, it is absolutely essential that we let this process run its due course.

"This is a major social issue in Australia. This is the moment in our history where we need to address it as a community."